RBS suspends senior trader amidst allegations of Libor manipulation

Royal Bank of Scotland suspended Jezri Mohideen, a senior trader, this week amidst allegations that he instructed colleagues to undershoot Libor rates when he was head of yen products in Tokyo.

RBS has dismissed four other traders related to their involvement in the Libor scandal. One of the traders, Tan Chi Min, is suing for wrongful dismissal, according to The Globe and Mail.

Tan said in papers filed at a high court in Singapore that he was required to provide RBS’ Libor rate-setters with “input” under the encouragement of the bank and that the input he provided to rate-setters during daily meetings between 2007 and 2011 involved traders in Singapore and London.

Another former RBS trader described the Libor-setting process between other traders and banks as a cartel.

Mohideen’s dismissal comes as regulators, including the U.K.’s Financial Services Authority, prepare to fine the bank for its role in the scandal.

“Our investigations into submissions, communications and procedures relating to the setting of Libor and other interest rates are ongoing,” an RBS spokesman said, Equities.com reports. “RBS and its employees continue to cooperate fully with regulators.”

In the first step by regulators to repair the Libor-setting system, the FSA announced last month a 10 point plan to reform Libor but decided against scrapping the key interest rate.

RBS, which is 83 percent taxpayer-owned, suffered another blow last week after Spain’s Santander withdrew from a deal to purchase 316 RBS branches that the bank was required to sell under state aid rules of the European Union.